A new report on the 2010 Global Powers of Retailing published by Deloitte Touche Tohmatsu outlines some of the key retail trends for 2010. Three of its top forecasts are detailed below.
1.Most retailers have yet to make online push as social networking sites start to make an impact. Multichannel retailing continues to grow as more companies develop an e-commerce capability. However, online still accounts for a small percentage of sales.
On average, online sales account for 6.6% of total sales for the top 100 retailers in the world. "The internet is going to pose an ever-greater challenge and opportunity for retail in the next decade," said Dr Ira Kalish, director of consumer business for Deloitte Research in the United States.
"Retailers need to ensure their multichannel strategy is in place to capitalise on web-savvy shoppers migrating to the net. Secondly, we are starting to see retailers launch targeted marketing campaigns online by offering special deals or discounts through their website or social networking sites."
Social networking will increase transparency in the retail industry, giving consumers greater access to information about retailers, their products and pricing. "This has the potential to undermine margins by lowering prices to the level of the most desperate seller. There are great opportunities too, as new touch points open up for retailers to communicate with their customers."
2:Emerging market retailers set to take on established players. "Many emerging market retailers are rapidly becoming world-class players in their own right," said Kalish. "Not only are they well-equipped to compete with the global giants in their home markets, some are becoming competitive in other markets too.
The next step will be investments into developed markets and some of this is starting to take place. "These are typically specialty players rather than food or mass merchandise retailers. The global playing field of retailing is becoming more level."
3:Global growth bounces back but economic rebalancing is taking place. "Countries that borrowed heavily to finance excessive consumer spending may experience slower consumer spending growth as households struggle to de-leverage, repair tattered balance sheets and accumulate wealth," said Kalish.
More of the economic growth of these countries will be driven by exports, business investment and government spending. "Conversely, those countries whose growth was fuelled by exporting to borrowing countries will no longer be able to depend on such markets and will likely shift away from export-oriented growth toward growth driven by consumer spending."
Retail spending growth in markets such as the US and UK is likely to be slower over the next decade, while a larger share of the growth will take place in countries with large surpluses, especially the big emerging markets.
Originally published in New Cloth Market: February 2010